Salaries for high-level executives increases in last decade
When he arrives on campus Feb. 23, Robert Martin will be the 14th highest-paid employee at Central Michigan University, earning $230,000 each year.
In an effort to increase fundraising and more aggressively pursue donations, President George Ross hired Martin as vice president for advancement. He was recruited from Eastern Illinois University, where Martin said he was paid “close to $185,000.” The additional salary that comes with his new job is one example of the pressure of competitive salaries on recruiting in higher education.
“You want to get the best people — make sure you are doing what is right and fiscally responsible for the university and also attract the best possible candidate,” said Sarah Opperman, CMU Board of Trustees chairwoman. “If you have positions that are fairly competitive and tough to get better people, then generally speaking it will drive (salaries) up.”
In 10 years, the amount CMU spends on compensation for all its employees has increased by $97.5 million — from $186.6 million to $284.1 million. Opperman and Barrie Wilkes, vice president of Finance and Administrative Services, both said CMU must offer competitive wages to recruit good employees, but also to keep them.
“We can’t always keep up,” Wilkes said. “We can’t always pay what someone demands, and then we need to make some decisions about what needs to be done differently or if CMU can offer some things that would attract them, other than the highest salary.”
Since 2005, CMU has added 498 faculty and staff, increasing the number of employees to 2,653. While the faculty and staff headcount increased 23 percent during that time, the university now spends 52 percent more on salaries and benefits.
CMU’s philosophy is to base salary decisions on market analysis conduced by the Department of Human Resources, Opperman said.
Associate vice president of Human Resources Lori Hella, said CMU attempts to offer compensation at 90 to 95 percent of what the market average salary is.
Other factors also determine salaries, Opperman said, such as the position’s duties, scope of responsibility and how it compares to other salaries within the university.
Senior Vice Provost of Academic Administration Ray Christie, said human resources determines what the pay range is for positions at similar universities and makes a recommendation to Ross, who then makes the final decision.
Offering competitive salaries, Ross said, is one of the biggest financial challenges that the university faces.
“When we compete (to fill positions) we compete for the best,” Ross said. “We are not going to hire a faculty member because we can get he or she cheaper. We are going to get the best quality faculty that we can convince to join the team.”
During the last decade, the largest growth in compensation spending came from faculty and staff in CMU’s academic colleges, increasing by $48.9 million. The largest increases came in the College of Humanities and Social and Behavioral Sciences, from $20.4 million to $32.5 million, and the College of Science and Technology, from $19.8 million to $32.2 million.
While responsible for the largest amount, employee salaries in the academic colleges have received increases either at, or below, the rate of inflation since 2005.
The average full-time faculty member at CMU is paid $102,087 a year, ranking the university sixth among its 12 peer institutions, and just above the peer average of $101,120. The University of Nevada pays its full time faculty members $121,932 a year, the highest of CMU’s peers.
The average associate professor at CMU is paid $78,894, the average assistant professor is paid $68,580 and the average instructor is paid $50,445, according to Faculty Personnel Services.
“Faculty members aren’t making more money,” said David Jesuit, professor in the Political Science Department. “In fact, less money is flowing toward education because basically there is a shift from hiring full-time tenure track faculty to part-time and adjunct fixed-term faculty. Those individuals earn substantially less.”
Jesuit is president of the Faculty Association, a union that represents all full-time regular faculty and helps negotiate the collective bargaining agreement with CMU each spring. He said a 30-year trend toward increasing professional staff positions seems to have intensified in the last decade.
“The enormous increases in the number of administrators in higher education, as well as the increases in their compensation, coincides with the shift toward a model of higher education that reflects the business community,” he said. “There is this ideology of privatization and maximization of efficiency. However, it really hasn’t maximized efficiency in terms of cost, because that has increased.”
Union of Teaching Faculty President Amanda Garrison said there are fewer tenure-track opportunities for faculty. Full-time and tenured faculty members who retire are often not replaced, she said.
“Administrator” is not an official term for positions used by the university, however senior officers and professional staff are high-level positions that perform management tasks. These positions hold executive responsibilities on and off-campus.
Opperman said Ross can recommend a position to the board, or they can come to him with a recommendation if a need is identified.
Ross previously explained his personal philosophy when discussing the new advancement position in an August interview. He used the example of hiring Steven Johnson as the vice president for Enrollment and Student Services in 2011 to illustrate his decision-making process.
At the time, CMU was preparing to face a projected enrollment decline after having a 10-year record number of on-campus students. Retention rates dropped because the university had lowered its admission standards, he said.
“There wasn’t what I would call a professional enrollment managing function at CMU,” Ross said. “We needed an enrollment managing professional. We needed to treat our enrollment like private colleges and universities have been for years.”
Ross said he was criticized for creating another administrative position and adding cost, but explained that Johnson was able to stabilize retention. Johnson began in Jan. 2012 when the one-year retention rate of new freshmen was 75.4 percent. A year later, this figure increased to 76.9 percent.
“That’s not by accident, you have to put the energy and the resources into that,” he said.
In 2005-06 there were 36 senior officer positions filled. Since then, Wilkes said four senior officer positions have been created in the College of Medicine, and the Associate Vice President of University Recreation was reclassified with the enhanced title. The new positions have all been created since Ross became president in 2010.
GET TO KNOW THE TOP 25
Twenty of the Top 25 highest-salaried employees are senior officers, including Wilkes, who earns $237,211 and Ross, who earns $450,000 after a recent salary adjustment.
Eight of the Top 25 highest-paid employees work in the College of Medicine, six are deans of the university’s eight academic colleges and four are Athletics Department employees. Thomas Weirich, professor in the School of Accounting, is the only non-CMED faculty member in the Top 25, earning $191,138 this year.
The salaries of these 25 employees total $6.3 million, but including benefits pushes that amount to more than $8.
After CMED Dean George Kikano and Ross, football coach John Bonamego technically has the third-highest salary among university employees at $357,000. However, he will earn $482,000 a year with the addition of a $125,000 payment for media and promotional appearances. This makes him the second-highest paid employee at CMU based on salary.
Bonamego also receives annual retention bonuses, a feature added to Ross’ salary adjustment after he became a candidate in the University of Nebraska’s presidential search in 2015.
Bonamego will get his first $25,000 retention payment on Feb. 15, another $30,000 if he remains coaching at CMU through Feb. 15, 2017 and $50,000 if coaching through Feb. 15, 2018. Ross receives an additional $30,000 each year on June 30.
During the last decade, these executive positions have seen salaries rise quickly when compared to the average faculty member. Compared to 2005, the head football coach, university president, head basketball coach, Dean of the College of Business, Athletics Director, women’s basketball coach and provost are each individually earning at least $100,000 more.
The president and head football coach are paid almost $200,000 more since 2005. Bonamego earns 132 percent more as head coach than when Brian Kelly lead the Chippewas 10 years ago.
Compensation spending in subsidized auxiliary centers like the Athletics Department, Computing Support and CMED Clinical Operations have increased the most rapidly. These centers increased employee compensation 235 percent, from $8 million to $26.9 million in 10 years.
Salaries for the eight CMED faculty and staff positions total $2.2 million.
Steven Vance, associate dean for Academic and Clinical Technology in CMED, earns $331,000 a year, followed by CMED faculty member Sandra Howell ($300,333), Senior Associate Dean of Faculty & Administration Linda Perkowski ($235,000), Senior Associate Dean of Research Edward McKee ($230,000), and medical faculty members Meredith Goodwin ($195,019) and Paul Simmons ($194,650).
Compensation for faculty and staff in the Athletics Department alone totals $10 million this year — that’s an 180 percent increase since 2005. Bonamego is joined in the Top 25 by basketball Head Coach Keno Davis ($306,000), Director of Athletics Dave Heeke ($254,898) and women’s basketball Head Coach Sue Guevara ($204,000).
Heeke said Bonamego’s retention payment was added as a way to provide an incentive to build the program year by year and keep his salary competitive as the market changes. The Board of Trustees offered a similar explanation for Ross’ retention bonuses last year.
“The same argument is made that the market demands it and, in fact, in (Ross’) specific case I think that is probably right,” Jesuit said. “Now the problem is that bigger pushback. Why are we paying so much for these administrators in higher education?”
When accounting benefits and other budgeted compensation, the pay gap widens further between CMU’s highest paid staff and the average faculty member.
According to the employee compensation budget, a document that includes all current positions as of May, 1, 2015, Ross receives $168,324 in benefits — that’s $66,237 more than the average full-time professor’s salary and is almost twice what the average associate professor makes each year.
The extent of benefits and other compensation depends on the employee, but Kikano earns $110,038 and most of the Top 25 positions earn more than $50,000 in benefits.
Overall expenses have increased from $318.4 million in the 2005-06 academic year to $483.2 million in 2015-16. Tuition is responsible for covering more of the business of higher education than ever before.
Covering costs was easier in the past, Wilkes explained, because universities knew the majority of funding would come from state funding. Tuition used to be “fringe money,” he said.
Today, tuition comprises almost 60 percent of CMU’s revenue.
That’s not all that has changed. Teachers used to be able move up from the classroom to occupy these administrative positions, Jesuit said, but now universities hire executives with business backgrounds. He is concerned that universities are less focused on providing education and more focused on maximizing revenue.
“Higher education wasn’t built by these outside consultants, these presidents who have business experience,” Jesuit said. “We are not making widgets for cars. It’s not a business where there is a bottom line and we have to make money for our shareholders. That is not our mission. We have a public mission, to provide education, further knowledge through research and if you just want to apply dollars and cents to that it doesn’t add up.”
CMU’s funding model is closer to that of a private institution and students are the customers, Jesuit said. This has contributed to a shift in priorities among university administrators, to find external funding alternatives to student tuition.
“This shift of our model toward this business model has resulted in changes toward their duties,” he said. “I would rather go back and say ‘screw it, we don’t need to pay anyone $450,000 let’s bring up some faculty through the ranks.’ This is how we built the higher education system. We didn’t need all of these vice presidents.”
Prior to his position as president of CMU, Ross worked in the private sector as a certified public accountant. Since then, Ross has held titles in 28 years of higher education experience like director of finance, Vice President for Business and Fiscal Affairs, Vice Chancellor for Administration and Finance, and Vice President for Finance and Administrative Services.
While Ross said he remains student-focused, he acknowledged his business background gives him an advantage as the demands placed on administrators in higher education change. Ross spends a lot of his time fundraising, but does not consider CMU’s operation is comparable to a business.
“We have a financial responsibility to this institution, but I never have thought about us answering to shareholders making a return on investment,” he said.
Student Government Association President Chuck Mahone said budget-based decisions can take priority over a focus on student success.
“One of the (messages) I have heard most often throughout the university is ‘Yes we are a college, but we are also a business.’ A lot of the administration, even the faculty and students, have taken on that mentality and they prioritize business decisions a lot of the time over student or faculty success.”
Opperman said the new advancement position is part of a larger initiative to find donors and graduates to give back to the university.
“That certainly takes the stress of and reduces the overall cost that has to be placed on the student,” she said. “We’ve got to find ways to deliver high quality programs without putting any more strain on students and their families and that is the importance of advancement.”
CMU’s focus is still the same as when she graduated in 1981, Opperman said: educating students.
“I can tell you is that the focus is very much on delivering for our students the very best and highest quality education,” she said. “That includes the facilities and support functions that go with that. (My) personal view is that CMU is, when I was a student, is today and I hope always will be, about student success.